Government may offer up to 15% discount on new vehicles if you junk your old ones

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Government may offer up to 15% discount on new vehicles if you junk your old ones

NEW DELHI: The road transport and highways ministry has prepared a draft voluntary vehicle fleet modernisation policy for four-wheelers older than 12 years.

As per the policy, anyone voluntary scrapping his pre-Bharat stage II vehicle (older than 12 years) will get up to 15% discount (including manufacturer discount and rebate on excise duty) on new vehicles. Both commercial and passenger vehicles will be covered in this policy and government will give certificates of discounts those scrapping their old vehicles. Those certificates could be produced at the time purchasing new vehicles. The roads ministry will also certify the scrapyards for old vehicles, a senior government official said.

In phase-II, government will provide similar incentives to owners of old two-wheeler vehicles as well.

In India, there are over 40 lakh Pre BS-II four-wheeler vehicles in both commercial and passenger segment. With two-wheeler, the total goes to almost one crore vehicles that are older than 12 years. "We'll be proposing a 60% rebate on excise duty to finance ministry for people going for modernisation of their fleet. A draft policy would soon be made public for comments from stakeholders," a senior government official said.

Pre-BS II vehicles are almost 10 times more polluting than BS V vehicles, a transport ministry study has found. "It's a multi ministry exercise so it could take some time. But roads ministry has finalised it from its side. It will now be taken up with finance, law and environment ministries," the official added. Road transport and highways minister Nitin Gadkari gave his final nod to the policy on Wednesday.

The government has already held several meetings with auto companies on the upcoming policy. Earlier, the policy was only being made for commercial vehicles but now it will cover passenger vehicles as well since it will be mandatory. According to a senior government official, such policy would not only reduce pollution by 80% but will also increase sales of auto companies by almost 30%. The government has already notified April 2016 as the date for implementation of environment friendly Euro VI norms.